英文版微观经济学复习提纲Chapter-15.-Externalities--environment

15Externalities,EnvironmentalPolicy,andPublicGoodsChapterSummaryAnexternalityisabenefitorcostthataffectssomeonenotdirectlyinvolvedintheproductionorconsumptionofagoodorservice.Negativeexternalitiesarecostsimposedonnon-consentingindividuals.Positiveexternalitiesarebenefitsreceivedbyindividualsnotdirectlyinvolvedinproducingorpayingforagoodorservice.Whenthereisanegativeexternalityastheresultofproduction,themarketsupplycurveunderstatesthefulleconomiccost(thesocialcost)ofproduction.Economicefficiencywouldbeincreasediflessofthegoodorservicewereproduced.Whenthereisapositiveexternality,themarketdemandcurveunderstatesthefulleconomicbenefit(thesocialbenefit)fromconsumptionandtoolittleofthegoodisproduced.Negativeandpositiveexternalitiesleadtomarketfailure.Encompassingbothpositiveandnegativeexternalities,itistheabsenceofprivatepropertyrightsthat’stheunderlyingcauseofexternalities.Marketfailurealsoresultsfromproblemsenforcingprivatepropertyrights(forexample,laxgovernmentenforcementofcopyrightlaws).Whenprivatesolutionstoexternalitiesarenotfeasible,governmentinterventionmayberequired.Forexample,ifanegativeexternalityispresent,governmentcanimposeataxequaltotheadditionalexternalcosts(thedifferencebetweensocialcostandprivatecost).Forpositiveexternalitiesgovernmentcanprovideasubsidytoconsumersequaltotheexternalbenefits.Toreducepollution,governmentshaveoftenusedacommandandcontrolapproach.Thisoftenmeansthegovernmentsetsspecificrulesforthequantitativelimitsontheeachpollutantemitted.Anotherapproachistodictatetheinstallationofspecificpollutioncontroldevices.Forexample,in1986theAustraliangovernmentrequiredtheinstallationofcatalyticconvertersonallnewcarstoreducecaremissions.OnenotableexceptiontothecommandandcontrolapproachwastheU.S.government’sattempttoreduceacidrainpollution.IntheCleanAirActof1990Congressrequiredelectricutilitiestoreducetheiremissionsofsulphurdioxide,amajorcauseofacidrain.Thesuccessofthesulphurdioxideprogramhasledsometosuggestthatasimilarprogrambeusedtoreduceemissionsofso-called“greenhousegases”thatcontributetoglobalwarming.Otherreasonsforgovernmentinterventionmayincludecasesinwhichproductsarerivalorexcludable.Rivalryoccurswhenconsumptionofoneunitofagoodprecludesitsconsumptionbysomeoneelse.Excludabilitymeansthatanyonewhodoesnotpayforagoodcannotconsumeit.Becausecommonresourcesarenotprivatelyowned,theyareoftennon-rival,non-excludableorboth.Thereisatendencyfortheseresourcestobeoverused.Thisiscalledthetragedyofthecommons.Externalcostsarisefromtheuseofacommonresource.Sincetheprivatecostislessthanthesocialcostthemarketequilibriumforthegoodoccurswherethemarginalcostexceedsthemarginalbenefit.Lefttoitsowndevices,themarketequilibriumwillimplythattoomuchofthecommonresourceisconsumed.Governmentinterventioninthismarketmayinvolverestrictingaccesstothecommonresource.223Chapter15LearningObjectivesWhenyoufinishthischapteryoushouldbeableto:1.Identifyexamplesofpositiveandnegativeexternalitiesandusegraphstoshowhowexternalitiesaffecteconomicefficiency.Anegativeexternalitycausesthesocialcostofproductionofagoodorservicetoexceedtheprivatecostbornebytheproducer.Thesocialcostincludestheprivatecostandtheexternalcostfromproduction.Anegativeexternalitycausesoutputtoexceedtheeconomicallyefficientamount.Apositiveexternalitycausesthesocialbenefitfromconsumingagoodorservicetoexceedtheprivatebenefit.Thesocialbenefitincludestheprivatebenefitreceivedbytheconsumerandanexternalbenefit.Apositiveexternalitycausesoutputtobelessthantheeconomicallyefficientamount.2.DiscusstheCoaseTheoremandexplainhowprivatebargainingcanleadtoeconomicefficiencyinamarketwithanexternality.Privatebargainingcanresultinanefficientsolutiontoproblemsarisingfromexternalitiesifthetransactionscostsfromthebargainingarelow.Privatepartiestothebargainingagreementmusthavefullinformationregardingthebenefitsandcostsassociatedwiththeexternalityandallpartiesmustbewillingtoacceptareasonableagreement.3.Analysegovernmentpoliciestoachieveeconomicefficiencyinamarketwithanexternality.Whenprivateeffortstosolveexternalityproblemsfail,governmentinterventionmaybewarranted.Whenthereisanegativeexternalityinproduction,governmentcanimposeataxequaltothecostoftheexternality.Whenthereisapositiveexternalityinconsumption,governmentcangiveconsumersasubsidyequaltothevalueoftheexternality.Governmentmayusedirectcontrolstodealwithexternalitiessuchasimposingaquantitativelimitontheamountofpollutionfirmsareallowedtoemit.Governmentcanalsouseamarket-basedapproachbysettingupasystemoftradeableemissionsallowancestoreducepollution.4.Explainhowgoodscanbecategorisedonthebasisofwhethertheyarerivalorexcludable.Rivalryoccurswhenoneperson’sconsumptionofagoodpreventsanyoneelsefromconsumingit.Excludabilitymeansthatanyonewhohasnotpaidforagoodcannotconsumeit.Agoodthatisrivalandexcludableisaprivategoodandmarketscansupplytheefficientquantityofthegoodwithoutgovernmentintervention.Ifagoodisnotrivalorexcludablemarketsarenotlikelytoproducetheefficientquantityofthegood.5.Defineapublicgoodandacommonresource,andusegraphstoillustratetheefficientq